Section 18(4)(b) of the National Credit Act (NCA) Regulations allows you to request a credit report for “Fraud Detection and Fraud Prevention” purposes.

We know that the purpose may be used for fraud prevention and detection services by, among others:

  • Internal fraud departments,
  • Fraud investigation specialists (such as audit and attorney firms),
  • Other private fraud investigation company, etc.

These services may include, but are not limited to, fraud risk assessments, fraud investigations, due diligence reviews, lifestyle audits, and other fraud prevention and detection services.

But what does that really mean?

The easiest place to start is with the definition of fraud. Fraud is defined as the making of an unlawful and intentional, misrepresentation or concealment of a material fact, that when acted upon by another will prejudice or potentially prejudice such a person. The terms defalcation, misappropriation, and other fiscal irregularities refer, but are not limited, to:

  • Any dishonest or fraudulent act;
  • Misappropriation of funds, securities, supplies, or other assets;
  • Impropriety in the handling or reporting of money or financial transactions;
  • Profiteering as a result of insider knowledge of company activities;
  • Disclosing confidential and proprietary information to outside parties;
  • Disclosing to other persons security activities engaged in or contemplated by the company;
  • Accepting or seeking anything of material value from contractors, vendors, or persons providing services/materials to a specific company;
  • Destruction, removal, or inappropriate use of records, furniture, fixtures, and equipment; and/or
  • Any similar or related irregularity.

Turning to the word “detection”, we can see this is defined as “the act of discovering the existence of something”. In this case it is the act of discovering the existence of fraud.

In order to make use of this prescribe purpose, the subscriber needs to demonstrate that it is involved in fraud detection work, and be able to show that the specific enquiry relates to detecting or preventing fraudulent activities.

By nature of the purpose, it is important to point out that no consent from the consumer is required and furthermore, that the enquiry footprint can be masked by the bureau provided that the subscriber complies with Compuscan’s Hidden Enquiry Policy.

For any questions or enquiries, please contact Compuscan’s Legal Department at: [email protected]

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